What is #adulting all about? 🤔
Adulting means putting all this optimisation towards one sole purpose.
You may be saying: ‘Right, I’m saving regularly now, I’m making a bit of an income and I’m getting on with university’
But for which purpose?
What am I saving this money for?
What am I supposed to do with life?
Yep, very scary questions. But it’s ok, I’ve got a few things to help you out here.
1. Getting a good job
Most people get a job after university. This is the ‘expected thing to do’ and a 'natural' path to take.
I am a firm believer in doing something that fulfills you. This doesn’t necessarily have to be a job in the traditional sense. This could be freelancing, volunteering, part-time work, etc.
And since you’re young, I believe it’s important to search for that thing that fulfills you and then get to the money.
Let me give you a simple example.
Anne and Jenny both love yoga and find it a fulfilling practice.
Anne gets a job in banking and works at a bank for 20 years. She saves up as much money as she can so she can reach financial independence and retire early (here’s the maths behind it). Now that she’s independent from her money, she decides to do what she loves and become a yoga teacher. Yay for Anne.
Jenny finishes university and decides to spend a year figuring out what fulfils her. She realises it’s yoga. She becomes a yoga teacher, and has a side-hustle on the side that makes her enough money to live on pretty comfortably. She’s still dependent on her money, but she’s flexible with her time and is doing something which is enjoyable.
Which one do you want to be? Anne or Jenny? Or something in the middle?
The worst thing that can happen to you is working a job for 40 years that you hate. Either do that job for 20 years and retire early, or don’t do it all and do something you actually enjoy.
This is tricky ground because every person’s situation is very different.
Finding a job or an activity that fulfils you can be very difficult, and there are few lucky ones who earn a good income doing something they love. But I don’t think it’s impossible - all you need is a growth mindset and the aspiration to live a fulfilling life.
I also feel it's important that while you're on your search for what fulfills you, keep a side hustle going so you're still making money, investing and learning about finance (and not starving to death).
Here are some cool articles to explore this topic even further...
Whether you want to retire early or not, investing is an essential part to #adulting. Why? Because believe it or not, you will reach a point in your life where you won’t have as much energy or ability to work - yes, the granny stage 👵
Being broke when young is one thing, but being broke when old is something no one wants.
But the good news is it’s very simple and easy to set up. Remember that % you put away when you set up your budgeting plan? What if you put a part of that towards investing?
We talk about Ben and Jill on the first page - you saw how Jill had nearly double the savings of Ben just because she started at 20 instead of 30. And that’s just by putting £100/month away - what if you could put more?!
This is the whole concept behind Financial Independence. A concept I love so much I manage a podcast about it with two other friends (check it out the FI Podcast 😜)
If you decide to be Anne and get a higher paying job, you want to make sure you’re putting as much as you can towards investments, so you can then reach financial independence and spend your days doing whatever you want, withdrawing from your investments every year (check out the maths behind this here).
This is why I’m always recommending young adults in their twenties to get started with investing as soon as they can - your future self will be eternally grateful (👵 -> happy 60 year old you)
To learn more about investing, check out these posts:
3. Paying off Debt
Oh no! I graduated with £40,000 in student loan debt! I will forever be in debt!
Chill. This is not the States.
We are fortunate enough in the UK to have very cheap student loans. Yes, university costs nearly £10,000 a year, but:
- You only pay that back once you earn more than £25,0000
- You only pay back 9% of your income
- It’s forgiven after 30 years.
It is true that ‘being in debt’ can mentally be a huge burden for some people, which could be a good reason to pay it off early.
But if it’s not a burden for you, do the maths and you’ll see that paying it off early could potentially cost you thousands more. Unless you’re earning a high salary (£50,000/year +) straight out of university, paying your student loans off early IS. NOT. WORTH. IT.
For more info on student loans check out these snazzy articles:
If you have consumer debt (so credit cards, payday loans, car loans, etc), get rid of those ASAP. They have extremely high interest rates and will cost you more money the longer you have this.
Here’s a cool plan on how to get rid of consumer debt as soon as possible.
You’ve hopefully gone through every step one by one, starting with ‘Why should I care’ to ‘Budgeting’ to ‘Snazzy saving hacks’ to ‘Making more ££’ to here at ‘Adulting’.
The key thing now is taking action.
You don’t need to do everything at once, but pick that one thing and start with it. Obviously I would pick the first an foremost; budgeting.
Start with getting your budget right. Once you feel that’s done properly, move on to reducing expenses. Once you’re comfortable with that, work on increasing your income, and then finally figuring out how to #adult.
I started on my personal finance path one year ago (September 2017), and quickly got overwhelmed with everything I had to fix. It’s only now, one year later, that I’m happy with how I’m managing my finances.
If it takes you one year, then so be it. Better one year at 20 than reaching the age of 50 and realising you've got a ton of mistakes to fix all while supporting other people.
And once you've got all that under control... learn how to optimise even more your money: set up a business, legally reduce your taxes and invest in other countries.
This is still a pretty new category as I learn more and more myself, however it's a fascinating subject and the earlier you learn about it the earlier you can implement money strategies to actually keep more of your own money.
So there you go! I continuously post helpful articles on the blog - to make sure you get notified of new posts and exclusive content, pop in your email below. Don’t worry, I never spam 😉